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Pricing forest carbon: implications of asymmetry in climate policy
Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE).
Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE).
2018 (English)In: Journal of Forest Economics, ISSN 1104-6899, E-ISSN 1618-1530, Vol. 32, p. 84-93Article in journal (Refereed) Published
Abstract [en]

Using an integrated assessment model, we examine the implications of climate policies that do not fully recognize forest carbon. Specifically, we first investigate the impact of an asymmetric policy that recognizes carbon emissions from fossil fuels while fully ignoring forest carbon. Next, we investigate the relative importance of not recognizing emissions from a reduction in the stock of forest biomass compared to not recognizing sequestration from the growth of forest biomass. We show that asymmetric carbon policies lead to lower levels of welfare, as well as higher emissions and carbon prices. This occurs because the forest resource will be allocated inefficiently under these carbon policies. Broadly, we find that when the social planner does not account for emissions or sequestration from the forest, the planner will set bioenergy levels that are too high and afforestation and avoided deforestation levels that are too low. Our results further reveal that not recognizing forest emissions leads to larger welfare losses than not recognizing sequestration.

Place, publisher, year, edition, pages
Elsevier, 2018. Vol. 32, p. 84-93
Keywords [en]
Climate policy, Forest carbon, Carbon neutrality, Integrated assessment model
National Category
Social Sciences Interdisciplinary Economics
Identifiers
URN: urn:nbn:se:umu:diva-151560DOI: 10.1016/j.jfe.2018.04.003ISI: 000442663300007OAI: oai:DiVA.org:umu-151560DiVA, id: diva2:1247095
Available from: 2018-09-11 Created: 2018-09-11 Last updated: 2018-09-11Bibliographically approved

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Brännlund, RunarLundgren, Tommy

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Center for Environmental and Resource Economics (CERE)Umeå School of Business and Economics (USBE)
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CiteExportLink to record
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Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
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  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
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